An Old Myth About the New Deal
3 September 2006
The Editor, New York Post
To the Editor:
Recalling the Great Depression, Susan Tannenbaum asks "Didn't President Roosevelt respond to that calamity with an alphabet soup of government-funded organizations and lots of action designed to get the country back on its feet? Why can't we do that for the Gulf Coast?" (Letters, September 3).
Let's hope we don't do the same for the Gulf Coast. Contrary to popular myth, FDR's New Deal did not end the Depression.
In fact, by discouraging investment, subsidizing non-production, promoting cartels, and preventing wages and prices from adjusting to market realities, the New Deal was itself the great calamity of the 1930s.* Having endured one of America's worst natural disasters, residents of the Gulf Coast should be spared a replay of one of our worst man-made disasters.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* See Robert Higgs, Depression, War, and Cold War (Oxford University Press, 2006):
http://www.lfb.com/index.php?deptid=&parentid=&stocknumber=EH9102&page=1&itemsperpage=24
The Editor, New York Post
To the Editor:
Recalling the Great Depression, Susan Tannenbaum asks "Didn't President Roosevelt respond to that calamity with an alphabet soup of government-funded organizations and lots of action designed to get the country back on its feet? Why can't we do that for the Gulf Coast?" (Letters, September 3).
Let's hope we don't do the same for the Gulf Coast. Contrary to popular myth, FDR's New Deal did not end the Depression.
In fact, by discouraging investment, subsidizing non-production, promoting cartels, and preventing wages and prices from adjusting to market realities, the New Deal was itself the great calamity of the 1930s.* Having endured one of America's worst natural disasters, residents of the Gulf Coast should be spared a replay of one of our worst man-made disasters.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
* See Robert Higgs, Depression, War, and Cold War (Oxford University Press, 2006):
http://www.lfb.com/index.php?deptid=&parentid=&stocknumber=EH9102&page=1&itemsperpage=24
Posted by Don Boudreaux on
Friday May 18, 2007 at 4:07pm